For permission to file U.S. taxes you need a TIN which is either a SSN or an ITIN

Many Americans abroad have not aware of their obligation to file U.S. taxes. Some categories of people who are NOT “U.S. persons” are also obligated to file U.S. taxes. Basically without some kind of TIN (“Taxpayer Identification Number”) you can’t file a U.S. tax return period.

The Acronyms:

TIN – Taxpayer Identification Number

SSN – Social Security Number

ITIN – Individual Taxpayer Identification Number

The question becomes:

Which kind of TIN should you have? Should you have a SSN or should you have an ITIN?

U.S. tax lawyer Virginia La Torre Jeker explains explains this very well in her post:

The Taxpayer Identification Number (TIN) for U.S. citizens is their Social Security Number (SSN). An alternative Taxpayer Identification Number is the Individual Taxpayer Identification Number (ITIN), which is often issued to so-called resident aliens or nonresident alien individuals who may have a US tax reporting obligation. U.S. citizens are not eligible for this type of identification number and should not apply for an ITIN. In order for US persons to fill out a tax return, they must have a SSN. Many US citizens living abroad did not receive a SSN as a child, and after the age of twelve it is particularly difficult to get one. This causes big problems when trying to file US tax returns or pay taxes later on in life.

The necessity of having a SSN to fill out tax returns also leads to problems for people who wish to renounce their US citizenship since doing so requires five years of tax compliance prior to expatriation. The number of people who are renouncing their American citizenship is rising, in part, due to the implementation of the Foreign Account Tax Compliance Act (FATCA), a law which puts greater scrutiny on foreign accounts held by U.S. persons. With more people renouncing their American citizenship, there is a greater number of people without SSNs who are scrambling to get one, in order to fulfill their tax duties. If you wish to read more about the US tax consequences of expatriation or the latest legislative proposals heaping additional sanctions on certain expatriates, read my blog postings here, here, here and here.